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STAFF CONTRIBUTORS

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Ariana Eunjung Cha writes about the economy for the Post and is the Web editor for its national economy and business section. She has served as the paper's bureau chief in Beijing, Shanghai and San Francisco and as a correspondent in Baghdad.

Brady Dennis writes about economic policy and financial regulation. Before coming to The Post in September 2008, he was a staff writer at the St. Petersburg Times in Florida. At the Post, he was a finalist for both the Pulitzer Prize and a Gerald Loeb Award for a three-part series he and a colleague wrote about the rise and fall of American International Group.

Zachary Goldfarb has covered the U.S. financial crisis for The Post for more than three years. Originally from Manhattan, he is a graduate of the Princeton University and now lives in Washington, D.C. He enjoys vegetarian cooking, is getting started as a cyclist and spends too much time obsessing over gadgets.

Jia Lynn Yang is a staff writer at The Washington Post who covers policy that affects corporate America. She's interested in taxes, regulation and all the ways that business and Washington try to influence and make sense of one another. Before joining The Post, Jia Lynn was a Washington correspondent for Fortune magazine.

Neil Irwin writes about the U.S. economy and the Federal Reserve. He has been at the Post since 2000 and has an MBA from Columbia Business School, where he was a Knight-Bagehot Fellow in Economics and Business Journalism. His interests include bond market data, cured pork products, and pinot noir.

Lori Montgomery writes about national economic policy emanating from the White House and Capitol Hill. A former foreign correspondent who traveled Europe pre-euro, she also covered domestic politics in such disparate locales as Dallas and Detroit. She has three kids, one dog and no time for your so-called "interests."

Ylan Q. Mui covers the consumer economy and has been a member of the Financial staff since 2005 and a staff writer since 2002. She is also an adjunct journalism instructor at the University of Maryland. Ylan graduated from Loyola University in New Orleans, where she was born and raised.

Howard Schneider covers international economics and trade for the Post. He has served in a variety of roles at the paper, three tours abroad in Israel, Egypt and Canada, and as economics editor. He is a native of Maryland's Eastern Shore, and proudly includes a chief oyster inspector among his ancestors.

Mike Shepard is the Night Editor for Economy and Business News. A graduate of Georgetown University, Mike has worked at the Post for 22 years in a variety of editing assignments. He spent 1997 teaching journalism in Brazil on a Fulbright scholarship and is a fluent speaker of Portuguese.

Political Economy explores how political forces in Washington and elsewhere in the world shape the economy and how corporate agendas influence political institutions and politicians. The blog offers new perspectives on the day's top economic and business stories with exclusive interviews with government officials and lawmakers, commentary from influential economists and analysis from Post reporters. Ariana Eunjung Cha is the blog's lead writer and Mike Shepard is the author of the daily economic agenda.

"The Obama campaign publicly supported the bank bailout and then repelled the populist measures to really hammer banker pay when they got into office. The financial reform bill didn't break up the banks, set leverage requirements in statute or do any of a number of other things that would've really hurt the financial industry. The auto bailout was designed to preserve the existence of America's auto industry, and even the Economist has admitted that the Obama administration did everything in its power to "restore both firms to health and then get out as quickly as possible." The various stimulus measures have been designed to directly support businesses or indirectly support the people who those businesses rely on."

Steve Pearlstein's Take

"Given the fragile state of the economy, this is no time to be raising taxes on the middle class, as nearly every dollar taxed is nearly a dollar not spent buying goods and services... At the same time, even conservative economists acknowledge that while the rich account for a disproportionate share of consumer spending, raising their taxes by a modest amount won't alter that spending or have much of a short-term impact on the economy. The reason: Wealthy people make considerably more than they spend, and they save the rest."

Orszag warns against slashing deficit too quickly

By Nicholas Johnston
(Bloomberg) -- Peter Orszag, giving his last speech as White House budget director on Wednesday, defended the administration's economic policies and said it would be "foolish" to try to slash the deficit before the recovery takes hold.

Orszag, who is leaving his post at the end of the week, said the measures taken to try to stem the worst recession in more than 70 years, including the $862 billion stimulus, helped boost U.S. economic growth and reduced job losses.

While the government must address the nation's long-term debt, "it would be foolish to dramatically reduce the deficit immediately" because that would choke off the recovery, Orszag said in an address at the Brookings Institution in Washington. "The right combination is more fiscal discipline in the medium- and long-term, and more support for the economy in the short term, and both sides need to acknowledge that."

The White House Office of Management and Budget said in a July 23 budget update that the federal deficit will be a record $1.47 trillion this year, or 10 percent of the gross domestic product, and $1.42 trillion next year.

Orszag said the administration has taken steps to deal with the deficit in coming years, including a three-year freeze on discretionary non-defense spending, cuts in unnecessary programs and an overhaul of the U.S. health-care system. The health-care plan, which President Obama signed into law in March, is crucial to deficit reduction because it will trim the rising costs for medical treatment, Orszag said.

The growing cost of health care is the "single greatest driver of our long-term deficits," he said.

Orszag said the recommendations from Obama's 18-member deficit commission also will be key to getting the budget under control. The commission, scheduled to give its report in December, is looking at ways to curb deficits to about 3 percent of the GDP by 2015, a level most economists say is sustainable.

Foolish? Yes. Deficit reduction. Foolish for the USA, Germany when it needed it and the biggest. A "total need" for smaller countries being comdemned to zero growth for long years. So clear. Monetary policy by itself is not enough to promote an enough quick recovery. This is what Mr. Bernanke is trying to hide, among others.

Orzag has the same problem as much of the offical bureacracy. That is believing there is some way for the economy to recover before it is fixed. There is no way the participants in the economy will make the difficult decisions needed to gain some kind of sustainable stability until the government's econcomic policies are normalized. Policy normalization has to come first. Given a decade or more's history of unsustainable government policies, even once the government policies have been normalized, it is going to take a lengthy time for the real economy to adjust to them and recover some relatively stable sustainable forward trend.

We the people need to force the creation of a self-sustaining, debt free government.

We've done it before and should do it now.

Congress would simply create the money it needs on a printing press or with accounting entries, then spend this money directly into the economy, debt free. As per Article 1, Section 8 of our Constitution.

The usual objection to this is that it would be highly inflationary.

No So.

The money would be spent by the government as is the case now, on productive endeavors that increased the supply of goods and services – public transportation, low-cost housing, alternative energy development, a stonger defense system, a new national grid,rehabilitating our infrrastructure and the like – supply and demand would rise together and price inflation would not result.

The American colonial governments issued their own money (Scrip) all through the eighteenth century. It was this original funding scheme that was responsible for the remarkable abundance in the colonies, at a time when England was suffering the depression conditions of the Industrial Revolution.

After the American Revolution, private bankers got control of the money supply; but Abraham Lincoln, and Congress at the time, followed the colonial model and authorized government-issued Greenbacks during the Civil War. Not only did this allow the North to win the war without plunging it into debt to the bankers, but it funded a period of unprecedented expansion and productivity for the country. While inflation did raise it's ugly head, we have never had a war where inflation did not occur. Moreover, gold and proprietary currencies Created by private banks in the South and West) were also in circulation during the 19th century which added to inflationary pressures.

Financing a 21st century New Deal without putting the country further into insolvency would not represent a radical departure from tradition but would mean a return to our roots. We would be returning to the forgotten but successful monetary policy advocated by our venerable forebears Benjamin Franklin, Thomas Jefferson, Andrew Jackson and Abraham Lincoln.

Issuing this debt free currency would also allow the Congress to reduce individual and corporate income tax rates by up to 80%, further stimulating consumer credit and capital investment. This would be possible because national debt service would be cut to zero in the first and subsequent years of a shift to this alternative.

Moreover, national debt could be reduced significantly, by exchanging the New Dollar for Treasury paper held by creditors. That Treasury paper would then be liquidated rather than rolled over, as is currnt practice. Doing so eliminates any threat of inflation.

An $8 trillion public debt held in Treasury paper is replaced by $8 trillion in New Dollars. M3 is unchange, not increased.